New data, but nothing really new as far as the Spotify payout rates are concerned. The rate per stream is steady, about $0.005. My royalty statements show $0.0054 in July, $0.0054 in August and $0.0052 in September.
But I do have some interesting extras.
Every stream over 30 seconds gets paid in full
My previous test was rather sloppy. I now recorded all sessions to be able to check the results one on one. Each time I listened to a song for just over 30 seconds, Spotify paid me the full rate of $.0052. None of plays under 30 seconds showed up in my statement. So we have got that figured out once and for all, another piece of the puzzle solved.
Rates of Spotify competitors
My statement shows a few rates (in Euros) from other services.
The king of streams, YouTube pays just 1/10 of the Spotify rate. But rates of 247 TDC Play (Juke) en Deezer are more striking. €.0357 ($.0461) and €.0335 ($.0433) per stream. That’s about eight times higher than the Spotify rates! How can that be explained?
The label Club AC30 was kind enough to let me have a look at their Spotify and Deezer statements. We both use the same aggregator Zimbalam/Believe Digital. This aggregator pays the same amount for every Spotify stream, regardless of the country and the subscription of the user. So a stream by a Free user in the US leads to the same rate as a song streamed by a Premium user in Sweden. The rate only differs every month, because of fluctuations in revenues and number of songs streamed.
To give you a rough example, a simplified calculation:
Revenue September: 30 million dollar.
70% for royalties: 21 million dollar.
Number of streams in September: 500 million.
September payout per stream: $21m/500m = $0.0042
The agreement between Zimbalam and Deezer has a more complicated system of rates. Deezer pays different rates for every country and subscription. These are the rates for France from December 2011 till July 2012:
I have to add that the tiers could be incorrect, it’s still an educated guess. I’m waiting for Zimbalam to explain the tiers. Somehow they seem to have a problem with that. Deezer has a Free tier with 30 second previews and Radio, The Premium is similar to Spotify Unlimited (5 Euro per month). Premium+ is like Spotify Premium (10 Euro per month).
The system of calculating the rates is like the one Spotify uses, but in Deezer’s case the rate is calculated for every individual tier and country. Other aggregators (like CDbaby and Catapult) use this system for Spotify as well.
But the big question is still unanswered: Why can Deezer pay higher rates?
The rate I get from Zimbalam is sort of an average of Free and paid streams. When I look at statements from other aggregators the highest Spotify rate I have seen so far is $0.01700. It’s in a CDbaby statement from July 2012 This must be a Premium stream, so this offers the best comparison.
The Premium+ rates from Deezer is 100% higher: €0.0335 per stream. It cannot be caused by higher revenues. Both tiers (Deezer Premium+ and Spotify Premium) have the same subscription price: €10/$10. That leaves only one option: Deezer Premium+ users somehow stream less songs.
I can only guess why. Deezer Premium+ comes free for customers of Orange, one of the biggest Telcos in France. Maybe these users are not that in to music as customers who pay for Premium themselves?
But there is more than rates alone. Let’s have a look at the streaming revenues of one of the artists of Club AC30 from December 2011 till July 2012
Deezer’s rates may be higher, but mainly because of the free tier Spotify generates way more streams, thus in the end a higher revenue. For now at least. I do realize that there are more factors involved, could be this band is less popular in France for instance. So let’s wait and see how things evolve in the near future.